Discussions around inclusive or progressive growth have multiplied since the election of Donald Trump, including by our own federal government. While traditional economists may be thinking primarily in terms of unemployed factory workers and the rural poor as the appropriate target categories for new inclusion efforts, I would argue that inclusive growth should first and foremost be viewed through a gender lens.
Not only are women the most disempowered group in any category of the world’s population, their skills and talents are the most underutilized. Consider that women make up the majority of university graduates in all but a handful of countries, and they drive 80 percent of global consumption decisions. And yet, women own only 30-35 percent of the world’s formally registered SMEs. They are a significant entrepreneurial force in the informal sector, but their companies grow slowly and they are under-represented in global trade. Firms owned by women are absent from global value chains, winning only 1 to 2 percent of contracts connected to multinational corporation purchases and government procurement contracts.
Meanwhile, there is a clear and growing body of research that unequivocally demonstrates that income streams concentrated in the hands of women result in healthier and better educated children. If the goal of inclusion is to ensure there is more even distribution of wealth and well-being, it is women who will best be able to deliver this result.
Women’s entrepreneurship and business ownership is recognized as a sector where there is significant potential to accelerate women’s economic contributions. The Americans lead the world in this respect. Since the 1980s, they have put in place laws and programming to accelerate the contribution of women business owners. Firms majority owned by women in the USA contribute $1.4 trillion to annual GDP and represent 34 percent of all firms. The corresponding number in Canada is 17 percent.
If Canada wants to unleash the true economic potential of women’s entrepreneurial sector so women profitably participate in international trade through NAFTA and other agreements, the government will need to accelerate its leadership and commit concrete resources.
Specifically, the government should do the following:
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- Rapidly accelerate the training of officials in gender analysis and the economy and link concrete results to departmental performance measurement systems. Without a serious gender analysis of all sectors of the Canadian economy, our trade negotiators will not know whether what they are ceding or gaining is affecting women and men differently. For example, the high profile trade files seem to be mostly in male- dominated industries. What work is being done to support the interests of sectors where women are better represented, such as the service industries?
- Increase financial resources to support the growth and international trade ambitions of women business owners, including increasing funding for the Women’s Enterprise Centres of Canada. An enterprise centre should be established in southern Ontario, where 40 percent of Canada’s women entrepreneurs reside. (This recommendation was made back in the years when Jean Chrétien was prime minister.)
- Create a permanent representative office for the voice of women business owners in Canada that is similar in purpose and structure to those of the US National Women’s Business Council. That council reports annually to the president and to Congress on the state of women’s entrepreneurship.
- Mobilize existing resources by amending the definition of innovation to include the creative ideas and social innovations brought about by women’s businesses and by nonprofit supporters such as SheEO.
- Move away from the generalities that characterize the gender chapters of trade agreements and instead include specific actions to improve the participation and success of women-owned businesses in international trade. The United States already has a government-wide procurement goal that 5 percent of contracts funds be awarded to women-owned small businesses.
A number of recent studies have attempted to estimate the growth that would result if women were better integrated into the global economic mainstream. For example, a McKinsey Global Institute study describes the global GDP growth potential at $12 trillion by 2025, with double digit GDP gains possible in India, China, Latin America and sub-Saharan Africa. The Taskforce for Women’s Business Growth, chaired by Barbara Orser at the University of Ottawa’s Telfer School of Business, estimated that a 20 percent increase in revenues for majority-women-owned firms in Canada would add over $2 billion to the Canadian economy annually. It appears The Economist got it right more than a decade ago, when it said “global growth is driven by women.” The world’s policy leaders and economists may be finally catching on.
This article is part of the Trade Policy for Uncertain Times special feature.
Photo: Shutterstock, by Elnur.
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